NCTA: FCC's Biz-Services Regs Must Focus on Market Power

WASHINGTON — The National Cable & Telecommunications Association says it has risked billions of dollars to get into the business data services (BDS) market — a market the Federal Communications Commission has said is key to the rollout of 5G — and its reward from the agency is the potential of rate regulations and unbundling that will hurt its chances of reaping any gains from that investment.

In its comments on the FCC's proposal to institute a technology-neutral framework — which means regulating competitors and new entrants, as well as incumbents, based on an as-yet undefined definition of market competitiveness — the NCTA said the FCC's proposal, which was approved along party lines in April, threatens the key goal of fostering facilities-based competition.

The NCTA has said the key issue is what providers of BDS service, and the answer should be the dominant carriers, but not their competitors. “The commission has long understood that there is never a need to regulate a new entrant because it has no ability to charge unjust and unreasonable prices,” the trade group told the FCC.

The NCTA said the FCC's reason for the regulatory remake — “technology neutrality” — has no basis in statute and “never has been the basis for imposing rate regulation on companies that do not possess market power.”

The NCTA does not buy the FCC's tentative conclusion that the enterprise data marketplace is broken. “Worse, the commission appears set on a course that will decrease investment and harm competition by not only imposing significant rate reductions on incumbent providers, but also seeking to require competitive providers to share their networks [unbundling] at those newly regulated rates.

“In a stark departure from sound economic and regulatory policy, the commission proposes to regulate a market that exhibits all of the hallmarks of a well-functioning, highly competitive market,” the NCTA said.

The trade group said that some 500 companies report providing this service as of 2013, and that is probably an underestimation.